Ch.

Ethics And Business

1.1
The Nature of Business Ethics
Ethic : the principle of conduct governing an individual or a
group.
Personal Ethics , Accounting Ethics
Morality : the standards that an individual or a group has
about what is right and wrong or good and evil.
Moral standards include the norms we have about the kinds
of actions we believe are morally right and wrong, as well as
the values we place on what we believe is morally good or
morally bad.
Moral norms can be express as general rules about our
action ,such as always tell the truth.
Moral values can be express with statement about objects or
features of objects that have worth , such as honesty is
good.
Nonmoral Standard include the standards by which we
judge what is good or bad and right or wrong in a nonmoral
way.
Six Characters of moral standards :
- Involve serious wrongs or significant benefits
- Shoul be preferred to othe values including selfinterest
- Not established by authorityfigures
- Felt to be universal
- Based on impartial considerations
- Associated with special emotions and vocabulary
Ethics : the discipline that examines ones moral standards or
the moral standards of a society to evaluate their reasonableness
and their implications for ones life.
Study morality :
a. Normative study : an investigation that tries to reach
normative conclusions about what things are good or
bad or about what action are right or wrong.
b. Descriptive Study : an investigation that attempts to
describe or explain the world without reaching any
conclusions about whether the world is as it should be.
Business Ethics
= a specialized study of moral right and wrong that
concentrates on moral standards as the apply to business
institutions, organizations, and behavior.
Kind of Ethical Issues :

Systemic = ethical questions about the social,

political, legal, or economic system within which
companies operate.
Corporate = ethical questions about a particular
corporation and its policies, culture, climate, impact,
or actions.
Individual = ethical questions about particular
individuals decisions, behavior, or character.

Applying Ethical Concept To Corporation

The acts of organizations are moral or immoral in the same way
that the action of human individuals. The corporations are
morally responsible for their acts.
Arguments Against Ethics in Business
- In a free market economy, the pursuit of profit will
ensure maximum social benefit so business ethics is
not needed.
- A managers most important obligation is loyalty to
the company regardless of ethics.
- So long as companies obey the law they will do all
that ethics requires.
Arguments Supporting Ethics in Business
- Ethics applies to all human activities
- Business cannot survive without ethics
- Ethic is consistent wiht profit seeking.
- Customers, employees, and people in general care
about ethics.
- Studies suggest ethics does not detract from profits
and seems to contribute to profits.
Business Ethics and Corporate Social Responsibility (CSR)
Business Ethics and CSR are related, they are not quite the same.
CSR refers to a corporations obligation toward society
- The shareholder view of Friedman says a managers
only responsibility is to legally and ethically make as
much money as possiblefor shareholder
- Stakeholder theory says managers should give all
stakeholders a fair share of the benefits a business
produces
- Business ethics is both a part of corporate social
responsibility and part of justification for CSR.
1.2
Ethical Issues In Bussiness
Technology and Business Ethics
Information technology : the use of extremely powerful and
compact computers , the internet, wireless communications,

digitalization, and numerousother technology that have

enabled us to capture, manipulate, and move information in
new and creative ways.
Globalization and Business Ethics
Globalization
- the worldwide process by which the economic and
social systems of nations have become connected
facilitating between them the flow of goods, money,
culture, and people.
- To large extent driven by multinationals.
Business and Ethical Relativism
Moral relativism / Ethical Relativism : the theory that
there are no ethical standard that are absolutely true and that
apply or should be applied to the companies and people of all
societies.
Objections of Ethical Relativism :
- Relativism privileges whatever moral standards are
widely accepted in a society
- Some moral standards are found in all societies.
1.3
Moral Reasoning
Moral Development
Kohlbergs three levels of moral development :
- Preconventional (punishment and obiedience)
- Conventional (law and order)
- Postconventional (social contract)
Moral Reasoning
The reasoning process by which human behaviors,
institutionsn or policies are judged to be in accordance with or
in violation of moral standards.
Moral reasoning involves:
- The moral standards by which we evaluate things
- Informtion about what is being evaluated
- A moral judgment about what is being evaluated
Moral reasoning should be logical, rely on evidence, and
consistent.
Moral Behavior
4 steps leading to ethical behavior:
- Recognizing a situation is an ethical situation
- Judging what the ethical course of action is
- Deciding to do the ethical course of action
- Carrying out the decision

1.4
Moral Responsibility and Blame
A person is morally responsible for an injury only if :
- Person caused of helped cause the injury, or failed to
prevent it when he could and should have
- Person did so knowing what he was doing
- Person did so of his own free will